Kingsport approves FY24 budget with no tax increase
The Kingsport Board of Mayor and Aldermen approved the Fiscal Year 2024 budget last night – a budget that includes no property tax increase, phase three of the city’s pay plan, funding to renovate the DB dome and $3.8 million for street resurfacing efforts.
The budget is the guiding financial document for the city and is made up of many parts – the general fund (main operating and capital fund for the city), water and sewer systems, the school fund and several smaller funds for things like solid waste, the Aquatic Center and MeadowView.
The BMA held a strategic planning session in February along with two budget workshops in May to review and discuss the budget. The budget has to be approved by the BMA on two readings, the second of which took place Tuesday night. The new budget goes into effect July 1 and runs through June 30, 2024.
Budget priorities this year included a continued emphasis on employees, education, economic development, infrastructure improvements and technology. Highlights from the General Fund Operating budget:
- No increase in property tax rate, which remains at $1.9983 per $100 of assessed value
- Funding for a School Resource Officer in every school
- Increased funding to assist in litter pickup throughout the city
- Increased funding to assist with Economic Development efforts
- Phase three of the employee pay plan approved
- Funding for continued technology improvements
- A $3.8 million allocation to street resurfacing
Kingsport’s General Fund stands at $95 million with a “rainy day” fund anticipated to be at $23.5 million once the FY-23 books are closed later this year. Kingsport’s bond rating remains strong at Aa2.
An increased cost in electricity and fuel, the national economy, and inflation were the major challenges facing city staff when assembling the budget for the next fiscal year.
One major impact to the budget came about as a result of an appraisal ratio study, which is conducted every two years per state law and is designed to create equity between personal and real property. In 2023, the study resulted in a loss of $3.4 million to the city’s general fund.
Kingsport had four options to solve this problem – raise taxes, make cuts to services, a combination of both or restructure the budget to absorb the loss.
“We recommended restructuring our budget because it provided the smallest impact to our operations and long-term plans,” said City Manager Chris McCartt.
In addition to the operating budget, the BMA signed off on the FY-24 capital budget. The $41.4 million capital budget covers the DB dome repair and renovations ($21 million), Justice Center expansion ($13.4 million), Kingsport Public Library renovations ($4.4 million) and various roads and infrastructure projects ($2.6 million).
The FY-24 budget also includes increases to the water rate (4.5%) and sewer rate (5.75%). The increases are due to a number of issues – flat revenues, federal regulations, inflation and an aging infrastructure.
For more information about the FY-24 budget, visit www.kingsporttn.gov and search ‘budget.’
